Congratulations to this week’s winner of the Raffle for Institutional Action Plan submitters, BRAC Tanzania!
The BRAC Microfinance Model
A distinctive aspect of our microfinance program is the credit-plus approach. Besides providing loans and training, we have developed an integrated set of services that work to strengthen the supply chains of the enterprises that our members invest in, giving them access to quality inputs and support in marketing their products. We also train our staff to be socially and ethically motivated to bring changes in the lives of our clients.
Our credit-plus approach is underpinned by our adherence to internal discipline and client care:
- We conduct weekly group meetings and provide social education and financial literacy about the loan products and how best to manage their businesses in order to pay back effectively.
- We have strong internal control and corporate governance based on our established International Standard Internal Audit Manual.
- Our monitoring department ensures that the program runs as planned and detects consumer exploitation wherever it exists.
- We ensure proper financial reporting with advanced IT, monitors, auditors and an accounting team.
- We have introduced a Review Unit for the overall performance of the branch and operations.
- We train staff on how to handle clients in the field.
- We provide doorstep service and collateral free loans with a group guarantee.
- We provide death benefits to our members.
We also follow the six principles of client protection:
- Reduction/avoidance of over indebtedness
- Transparent and fair pricing
- Ethical staff behavior
- Appropriate debt collection practices
- Mechanisms for client grievances
- Privacy of client data
BRAC has forty years of experience in poverty alleviation and sees microfinance as one of many tools to address the various causes of poverty. Based on this premise, BRAC Tanzania is working to improve the economic self reliance of the rural poor through micro loans, reinforced by livelihood development training. BRAC is strengthening existing entrepreneurs, but also creating a new generation of entrepreneurs in the country, and thus contributing to a healthy competitive economy.
Good coverage: BRAC Tanzania started its operations in mid-2006. We have built a strong financial network with 112 branches in 18 of the 26 administrative regions of the country. We have generated more than 1,200 employment opportunities for Tanzanian people.
In-depth Knowledge about Tanzania: We are working with 115,984 borrowers covering a total population of 644,000 among which 97.88% are female and 2.12% are male clients. Dealing with such a large community gives us an in- depth knowledge about the Tanzanian economy, as well as the opportunity to provide appropriate services as needed.
Driving Force for Growth & Development: We are one of the leading financial service providers of microfinance in Tanzania. Since the inception of the microfinance program in 2007, we have grown to cover 113,357 borrowers, disbursing a cumulative amount of USD $116,611,327 with an affordable loan size of only USD $272 on average, which the rural entrepreneurs feel comfortable borrowing.
Our portfolio accounts for 52% in trade, 19.5% in manufacturing, 9.5% in agriculture and 19.5% in other sectors. Having this knowledge allows us to examine differences in performance by client characteristics, and thereby identify market niches, opportunities, and problems. This also helps us to know how we can balance and stimulate the economy.
Targeting the Youth: We are working to address the socioeconomic vulnerabilities of adolescent girls aged 13-24 through financial empowerment, capacity building, and life skills training through 180 clubs all over Tanzania. Over 1,000 older club members have joined microfinance groups to get access to customized loans, giving them an early opportunity to engage in some form of income generation.